Apress from program to product turning your code into a saleable product mar 2008 ISBN 1590599713 pdf

From Program to Product: Turning Your Code into a Saleable ProductCopyright © 2008 by Rocky Smolin All rights reserved.. From Program to Product: Turning Your Code into a Saleable Produc

this print for content only—size & color not accurate spine = 5533" 224 page count

Foreword by Bob Walsh

Author of Micro-ISV: From Vision to Reality

How to Buy the Right Small Business Computer System (1981)

Production and Management Systems for Business (1990)

FROM PROGRAM TO

PRODUCT

From Program to Product: Turning Your Code into a Saleable Product

Copyright © 2008 by Rocky Smolin

All rights reserved No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system, without the prior written permission of the copyright owner and the publisher.

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be caused directly or indirectly by the information contained in this work

To my first wife

FOREWORD xiii

ABOUT THE AUTHOR xv

ABOUT THE TECHNICAL REVIEWER xvii

ACKNOWLEDGMENTS xix

INTRODUCTION xxi

CHAPTER 1 WHO WANTS TO BE A MILLIONAIRE? 1

CHAPTER 2 SO WHAT DO I DO FIRST? 23

CHAPTER 3 THE PROGRAM: FROM THE OUTSIDE LOOKING IN 61

CHAPTER 4 THE PRICE OF SUCCESS 103

CHAPTER 5 LEGAL MATTERS 129

CHAPTER 6 SOME FINAL CONSIDERATIONS 155

APPENDIX SAMPLE SOFTWARE LICENSE 185

INDEX 189

vii

Contents at a Glance

FOREWORD xiii

ABOUT THE AUTHOR xv

ABOUT THE TECHNICAL REVIEWER xvii

ACKNOWLEDGMENTS xix

INTRODUCTION xxi

CHAPTER 1 WHO WANTS TO BE A MILLIONAIRE? 1

So Why Did I Write This Book? 1

Why Am I a Programmer? 4

The Lone Ranger Rides Again 6

It Takes Two to Tango, Sometimes 6

Who Are You? 7

What’s the Big Idea? 8

What This Book Is Really About 8

How They Did It: An Interview with Software Developer and Entrepreneur Al Vanderpool 10

CHAPTER 2 SO WHAT DO I DO FIRST? 23

Define Your Product 23

How to Be Your Own Systems Analyst: Making a System Specification 24

Systems Analysis in Sixty Seconds: Input, Process, Output, Storage 25

What Comes Out? 26

A Digression: Data vs Information 29

ix

Contents

What Is Stored? 30

The Inputs 35

The Processes 36

Who Gets to Use It? Controlling Access to Data in Your Application 37

A Deeper Level of Control 38

Down to the Field Level 39

How Much Control to Build In? 41

Navigation: Finding Your Way Around the Program 41

Go Back Where You Came From! 44

The Platform 46

The Wrap-Up 46

How They Did It: An Interview with Jewelry Designer, Software Developer, and Entrepreneur Barbara Carlton 48

CHAPTER 3 THE PROGRAM: FROM THE OUTSIDE LOOKING IN 61

What I Don’t Want to Talk About 61

How to Hire a Programmer 62

What I Do Want to Talk About 65

The Opening Form 66

A Not-So-Foolish Consistency 69

Type Casting: Selecting the Right Font 74

The Color of Money: Picking the Right Palette 75

Preferential Treatments 78

A Foreign Concept: Getting Ready to Sell Overseas 79

Size Matters: Issues in Screen Resizing 85

When Good Software Goes Bad: Error Trapping and Reporting 87

A Quick Word About Mice 88

Testing 1, 2, 3 Is This Thing On? 89

And in Conclusion, My Friends 90

How They Did It: An Interview with Jackie and Doug Murphy of Murphy’s Creativity 91

CHAPTER 4 THE PRICE OF SUCCESS 103

A Matter of Definition 103

The Thing About Software 105

Breaking Even 106

What’s It Worth to Ya, Baby? Perceived Value 107

You’ll Never Walk Alone (Well, Rarely): Looking at the Competition 108

Finding the Peak of the Revenue Curve 110

Pricing Options 112

Fixed Price 112

Annual Subscription 112

Pay per Seat 113

Pay per Use 113

Pay by Capacity 113

Give It Away? 114

Getting Paid: Setting Your Payment Policies 115

Actually Getting Paid: Dealing with Your Receivables

and Their Payables 116

Leasing and Self-Financing 117

Annual Support: Creating an Annuity 117

And in Conclusion, My Friends 118

How They Did It: An Interview with Arthur Fuller 119

CHAPTER 5 LEGAL MATTERS 129

How to Talk to a Lawyer 130

Who Owns Your Software? 131

Never Sell Your Software 133

The Business Format 136

Sole Proprietor 137

Partnership 137

Limited Liability Company 138

Corporations 138

Insuring Success 139

What If You Get Hit By a Truck? Software Escrow 140

Copyrights 141

Trademarks 142

There Be Pirates Out There 143

How They Did It: An Interview with Barry Matfield 148

CHAPTER 6 SOME FINAL CONSIDERATIONS 155

When to Stop Programming 155

The Version Two List 156

Custom Tailored or Off the Rack? 157

Manual Labor 158

How to Get Started Writing Your User Manual 160

What to Say 161

When to Start Programming Again 162

Reference or Tutorial? 163

Back Matters 164

Online or Hard Copy 164

Online Help Or Not 165

It’s a Wrap: Packaging Your Product 165

The Last Word: How to Eat an Elephant 169

How They Did It: An Interview with Steve Capistrant of Symphony Information Services 170

How They Did It: An Interview with Reuben Cummings of Government Finance Consultants 178

APPENDIX SAMPLE SOFTWARE LICENSE 185

E-Z-MRP® Material Requirements Planning System— User’s Guide 185

Copyright Notice 185

Trademarks 185

License Agreement 186

Beach Access Software “As Is” Warranty Statement 186

INDEX 189

From Program to Product: Turning Your Code into a Saleable Product is a

book that could have saved me about ten years of pointlessly doing the samething over and over More to the point, it might just save you from the samecareer mistake

Let me explain

Every professional programmer in this industry—whether they freelancefrom project to project or work from job to job—sooner or later arrives at thepoint when they have to ask themselves, “Is this all there is?” You’ve gotten tothe point when you no longer stumble talking to potential customers, when

the earth doesn’t necessarily move for you every time the technology advances,when you fit comfortably in your skin as a professional programmer

Then what do you do? How do you get from the local max of being a petent and proficient programmer for others to being something else? Whatelse is there?

com-Now there’s nothing wrong with doing what you’re good at, year after year,project after project It’s fun, you learn new things, you meet interesting people,you may get paid to go to foreign places, and it pays the bills But it doesn’t getyou excited anymore

What Rocky does in this book is explore another way to go than down thatpredictable career path of freelancing or salaried work: he shows you step bystep, issue by issue, how to go from developing software applications for otherpeople to developing something better—a product

From Program to Product lays out the mental and educational process you

need to follow to go from software developer to product developer It is not

necessarily an easy transformation You won’t be the same programmer you

were after you finish Rocky’s book because you’ll have learned how to see yoursoftware in an entirely different way

From the bare beginnings where Rocky invites you to see what you’redoing in a new and different way, he takes you through defining a product, notjust an app; learning how to see your product from the outside in instead of

xiii

Foreword

from the inside out; thinking about how to price your product and ing the core economic reality of selling software; dealing with the legal aspects

understand-of selling intellectual property without being mugged; and coping with some

of the other tasks you need to master such as internationalization and mentation to get your product truly ready for the market

docu-By the way, I should make clear here that while I see Rocky’s book throughcode monkey–colored glasses, this is a book not just for programmers Ifyou’ve hired a programmer (and Rocky has some great advice on doing justthat) to implement your vision of a software application, this book will helpyou with both the big picture of just how to direct your project into a commer-cial product and the small but important details, like End User LicenseAgreements (EULAs), you need to get right to protect your investment.One of the things I really like about this book is that while Rocky shares hisexperience and insight as someone who has successfully gone from program toproduct, he goes beyond that to interview others who bring their own insightsand experiences to the buffet you get to feast at

In a lot of ways, Rocky has written the perfect prequel to my book,

Micro-ISV: From Vision to Reality (Apress, 2006) Where I focus mainly on

what to do after you’ve gotten your product to sell, Rocky covers the hardground of getting to that point That’s why I said at the top of this foreword I’dwished Rocky had written this book a decade ago—it would have immeasur-ably helped me go that first step from developer to micro-ISV

And that’s why I recommend Rocky’s book to you now If you’ve beendoing what you do for too long, if you’re looking for a clear path to break freefrom being just a programmer, Rocky is offering you what you need

It’s time to take the red pill

Bob WalshSonoma, CaliforniaFebruary 11, 2008

Rocky Smolin wrote his first computer program in

1964 at the age of 16 using computers at the IllinoisInstitute of Technology in Chicago He developedand sold his first commercial product three yearslater while studying for his degree in businessadministration at Bradley University in Peoria,Illinois, and went on to earn an MBA at San DiegoState University in 1974

After serving as director of information systemsfor several companies, he started his own small busi-ness systems consulting operation in 1980 At the start of the personal com-puter revolution, he codeveloped PMS-II, the first successful critical path

project management system for PCs, and went on to develop and market

E-Z-MRP—a manufacturing system for small manufacturers

Today as owner of Beach Access Software (www.bchacc.com), Smolin vides custom databases and applications exclusively in Microsoft Access, as

pro-well as continuing to market the E-Z-MRP system

Smolin lives with his wife of thirty-one years and two sons, 17 and 11, inDel Mar, California

xv

About the Author

Martin Reid is an analyst with The Queen’s

University of Belfast and has been working withrelational databases for more than fifteen years

Martin is currently working with MicrosoftSharePoint Office Server 2007 on a large-scaleenterprise deployment Martin has been technicaleditor on several Apress titles and is the author of

Pro Access 2007, also published by Apress.

xvii

About the Technical

Reviewer

I would like to acknowledge the invaluable assistance over the years of what ispossibly the most generous, friendly, and knowledgeable group of program-

mers it has ever been my pleasure to work with—the worldwide community

of developers at www.databaseadvisors.comand particularly those on the

AccessD list, who have saved my bacon numerous times and continue to do

so to this day

I would also like to thank those whose interviews are included in this book.They gave freely of their time and experience to help others like themselvesbecome more successful software entrepreneurs, and their contributions areinvaluable

And finally, I would like to express my deep appreciation to everyone atApress who had a hand in this project—particularly those who made the

decision to take the risk of going ahead with this project based solely on the

sketchy outline and résumé I submitted to them I hope their confidence in

me was not misplaced

xix

Acknowledgments

Programming it’s the most fun you can have with your clothes on At leastfor a propeller head like myself And making a pile of dough doing it—well,

what could be better?

But getting from an idea and bit of code to a polished product ready formarket takes more than great enthusiasm and a couple of cases of high-octanecola

Through hard experience, sometimes expensive and often painful, I havelearned what one needs to do to turn an idea for a software product into real-ity And that is what this book is all about The book begins with your idea for agreat program and ends with you at the starting line, product in hand, readyfor that first day of business and that first sale

I’d like to say that this is a top-down cookbook for success—as orderly as awell-written subroutine But it isn’t The software game is simply not that neat

So this book is more of a checklist, covering a wide range of topics—fromsystems analysis, to legal matters, to how to make your program look good tothe customer You’ll read about the economics of software—pricing, license

arrangements, and the like And get advice on what makes an effective manual,how to test your software, and many other topics you might not have thoughtabout

Interspersed among the chapters are interviews with folks just like youwho have been successful at turning their ideas into programs, turning the

programs into products, and turning the products into profitable businesses.They’ll tell you how they did it—what they did right and what they did wrong

If you have questions or comments about program design, product opment, packaging, or any other topics in this book, please contact me throughthe Beach Access Software web site: www.bchacc.com Really I would like to

devel-hear from you

A word about color: you’ll note that the figures and illustrations in thisbook are printed in black and white However, some of these figures are betteroff seen in color, and for a couple of them, seeing the colors is essential to

understand the point I’m trying to make All of the figures in this book are

xxi

Introduction

available in color on the Web as a download, and I would urge you to load these figures and have them handy when reading the book To downloadthe figures in color, point your browser to www.apress.com/book/view/

down-1590599713and look at the “Book Extras” section

Most of us harbor a secret fantasy about being in business for ourselves andraking in a lot of dough Some of us—like myself—are doing it and are halfwaythere—we’re in business for ourselves.

In the last fifty years, rock star aspirations aside, a popular dream is to be

a software entrepreneur who writes “The Next Great Killer Application”—aprogram that will cause a river of easy money to flow into your life

What you have is an idea for a computer program that you think would be

a popular product The state of your program may be anywhere from a baked scheme to a smoothly functioning program

half-What you don’t have is a way to get from idea to reality

You might already have crossed the finish line and be out in the free ket hawking this gem everywhere you can think of, and are perhaps not meet-ing with a great deal of success

mar-Turning an idea into a professional-looking, saleable product involves a lotmore than just writing a good program There are packaging, and marketing,and legal, and organizational, and technical issues to consider

And you are probably feeling that you don’t even know the right questions

to ask

So Why Did I Write This Book?

I’m a programmer I have been since I was a teener Oh, I’ve had lots of jobtitles, but at heart I’m just a geek programmer Right now, I write custom

databases and applications for a variety of small businesses using Microsoft

Access exclusively, under the company name of Beach Access Software

(www.bchacc.com) It’s fun It’s satisfying And having been doing this on

my own on a variety of platforms for nearly 30 years, I’m pretty much

One day I got a referral from a colleague to a fellow in Dallas—Jack Stone.Jack is a patent and trademark attorney at Scheef & Stone who had developedsome software in-house to help keep the legal matters under control.

Then, being both smart and ambitious, Jack decided that this programwould be attractive to a lot of law firms like his, so he hired a programmer andturned his attention to generalizing the application—making his highly cus-tomized, home-grown code into a program that would be usable by a lot ofother patent and trademark attorneys, and maybe even other kinds of lawfirms The program is called DocketWorks™and, as you can see, Jack has italready trademarked (Jack and I will talk about trademarks in a later chapter—what they are, how to get them Jack will give you his business card.)

This, of course, is how many, if not most, new software products beginlife—as a highly customized application that the creator wants to make into abest-seller

After a couple years of development, Jack had become disenchanted withthe programmer he had hired, and so Jack was looking around for a replace-ment At my request, he e-mailed me the current database and application so Icould give him my opinion of the state of the program and what it would take

to get across the finish line

After I looked at it, I had some good news for Jack The database—thetables where the actual data was stored—was pretty well designed And in theprogram itself there was a lot of functionality present

But the bad news was 1) a lot of buttons weren’t hooked up yet (that is,there was much functionality that was not yet implemented—doors leading torooms that hadn’t been built yet), and 2) the forms and reports were not veryattractive They were functional but, well, ugly No color, controls all crammedtogether—hard to read and not intuitive

By the way, I did not charge Jack for this analysis To me, the first look at apotential application is a job interview So if you find yourself in the position ofhaving to hire a programmer, my first piece of advice (among many to come) isthis: you can make your own judgment about programmers who charge theirregular hourly fee just to see if they want to work for you

My judgment is that it is not appropriate and should raise a red flag in yourmind Maybe they’re so successful they need to charge for sales calls just tokeep the riffraff away From that kind of programmer you may not get theattention or timely response you need Maybe they think that every word thatdrops from their lips is a pearl of great price In any event, be cautious aboutpaying someone just to look over your stuff

Anyway, after looking over the database that he had had designed and thestate of the program that he had had developed, I asked Jack for a kind ofroadmap document on the design and implementation plan for the product

to get a sense of just how far he’d come and how much road was ahead Jackdidn’t have that, but he had a database he developed himself of some 150action items—things the program needed, with priorities, subpriorities, andstatus But this was more of a task list of unrelated items—some small, somebig And it wasn’t the high-level plan I was looking for

So I began to ask Jack some probing questions:

j What is the target market? Exactly who needs your product?

j What problem does your product solve?

j How are you going to price your product?

j Will you package it or distribute it electronically?

j How are you going to reach the people who would want it?

j How are you going to protect your software from illegal copies?

j Who is the competition?

j What advantage do you have over them?

j How will you track your leads and sales?

j Will you be asking for annual support fees?

j Speaking of support, how will you provide it—both technical andoperational?

j Do you have a manual—planned or in process?

There were a number of technical issues as well:

j Will you use fixed screen resolution or form resizing?

j Will you require users to have Microsoft Access, or will you give them aruntime version?

j Do you have a consistent look for all forms and reports?

j Do you have a logo that appears in the same place on every form andreport?

j Will you be using floating forms or full screen?

On and on it went

And the answers to these questions were mostly that he hadn’t yet reallythought about these things His focus was on making the software work That’snot a bad motivation, but it’s kind of like starting to build a house without anarchitect and figuring to solve the problems as they arise (If you find yourself

in this position, you’re reading the right book You will need to reverse theprocess—to go back and do some serious design work before writing any morecode Keep reading.)

So I opened up a Word document and began to organize an outline of allthe action items I could think of that Jack needed to do or think about in order

to turn this raw program into a saleable product

I kept that Word document open for three days Every time I thought ofsomething Jack needed to consider, I added it to the document And at theend of that, we had a kind of rough roadmap to the finish line.

Looking over that document, I began to think about all the pain I sufferedlearning how to ask and answer the many questions that Jack hadn’t consid-ered when designing a software product for sale I thought about all the greatideas for programs that never made it to the product stage or failed aborningfor lack of good answers to these questions I thought of all the folks out therewho have a custom application they think would make a great product or just

an idea for a piece of software they think would be a winner And I thoughtabout the path from idea to product and the big black box in between—a boxthat includes product design, development, testing, and packaging

I looked over Jack’s outline again and thought “Wouldn’t this make a greatbook?”

Why Am I a Programmer?

As I noted at the beginning of the chapter, I’m a programmer I was a hackerbefore it became a criminal activity A geek A propeller head I got my firstexposure to computers as a high school student But in those days, there were

no computers in high school To get near a computer, I had to take a weekendcourse at the Illinois Institute of Technology in Fortran programming But Igot to write and run simple Fortran programs on the university’s massive sec-ond-generation IBM 7090 computer It was behind a glass wall in a tempera-ture-controlled environment And it had a small fraction of the computingpower of that three-pound notebook in your briefcase

I wrote the programs for it on punched cards with 24-hour turnaround oneach run A misplaced comma meant a lost day It was, viewed from today,awkward, expensive, clunky, and inconvenient

But I thought I’d died and gone to heaven There was something magicalabout the whole computer thing I was starting to get hooked

The college I went to had a computer, too One A lovely old IBM 1620with actual hard drives and a printer the size of a Volkswagen that soundedlike it was breaking concrete It was replaced in my sophomore year by anIBM 360/40—a big box with about a thousand blinking lights on the front Ihung with the IBM engineer, and by the time school opened in the fall, I wasthe only one on campus who knew how to start and run the beast

So the director offered me the job of systems manager, apologizingbecause it didn’t pay much “Pay?” I thought “They’ll pay me for what I’d

do for nothing?” Now the hook was in but not yet set

In my junior year, I decided to go for a proficiency grade in one of theschool’s few computer classes—do a big project, show you know the stuff, andskip the class work So I wrote a program Never mind what it was It was just

a utility program providing a feature for Fortran programmers that IBM

hadn’t provided And I got my grade

Then, I guess because I was a business student and kind of in training to

be an entrepreneur, I decided to see if I could sell a couple of these jewels.But I couldn’t afford to advertise, being a student, you know So I sent out apress release to the few computer magazines that were in print at the time

It got picked up by Datamation, and the staff gave me a reader service

number so people could circle it if they were interested in my product (noWeb at that time—it was 1968 and Al Gore hadn’t thought of it yet) They

would send me the leads (on sticky labels) I followed up with a letter and anorder form

For $40 (which was a couple of weeks’ worth of student groceries in thosedays) the buyer got a deck of IBM punched cards with my program on them.Imagine my surprise when people began sending me money The hook wasfinally set I got to play with the world’s best toys, and people pushed money at

me for doing it How could it get any better?

Well, it did My dream was to be rich enough and powerful enough oneday to own my own computer You’re laughing Yes, I now have seven, and afew more in the garage Computers have evolved from expensive, remote,

highly specialized machines, to appliances that almost everyone has and needs

In fact, they’ve become so ubiquitous, they are now an environmental wasteproblem

But as soon as Radio Shack came out with that TRS-80 Model II computeraround 1980, I moved from being gainfully employed to being a full-time,

independent, self-employed slacker playing all day with microcomputers andthinking about how to get people to send me money as a by-product of all thatplay time

The first thing I did was write a program for my wife, who wanted to start

a business tracking sales leads for companies and sending out their product erature That worked out pretty well I was beginning to think I’d never have

lit-to have a regular job again

Then, the fellow I was sharing office space with—a guy who, like me,was pretending to work while playing with these new personal computers—decided that a micro-based (we called personal computers “micros” in thosedays, until IBM came along and standardized our language) critical path proj-ect management system was something the world needed Boy was he everright about that

The first products were sent out on 8-inch floppy disks and included amanual that was printed in uppercase on a dot matrix printer, with no real

packaging The program was called PMS-II (a lot of software in those dayshad the -II appended to it—a tribute to the pervasiveness of the Radio ShackTRS-80 Model II microcomputer) And we charged $3,000 a copy

Those were heady days There were no set rules for product creation anddistribution We made them up as we went along So we couldn’t really makeany mistakes

And the checks began to arrive

3941d4f732e9db052c723207261284de

Of course, eventually, Microsoft came out with Microsoft Project for $69,and the game was over.

But the hook was finally set so deep it would never come out

Over the years, I have developed and sold other applications A couple ofthem I’ll use as examples in this book to illustrate points I’m trying to make

The Lone Ranger Rides Again

One product I’ll often refer to is a venerable old manufacturing system namedE-Z-MRP (www.e-z-mrp.com), designed for small manufacturers Originallyprogrammed in a DOS-based language on the old IBM PC, it was reinventedseveral years ago as a Windows-based product written in Microsoft Access Somost of the examples I use in this book are based an applications developed inAccess However, this book is not about programming but about creating aproduct So, regardless of the programming language you use to make yourproduct, this book will be both useful and pertinent

By the time I decided to leave the world of gainful employment, I had,through no deliberate plan of my own, gained a lot of experience in manufac-turing systems One of the painfully obvious things about manufacturing sys-tems was that only larger operations could afford the investment in dollars andtime to implement manufacturing software

But after the project management adventure, the rules had changed Ithought to myself “If a simplified interface could be designed so that the com-plex problem of controlling manufacturing could be understood and used bythe lowest-level person in a manufacturing business, I could go after the bot-tom 90 percent of the market where there’s no competition.”

It took real hubris to create a product that everyone in the business saidwas impossible But then entrepreneurs are not known for their humility Ortheir aversion to risk

Now, to create a good software product generally takes two skill sets Youneed someone who knows how to code up a smooth, graceful, effective pro-gram And you need someone who understands the application area

In the case of E-Z-MRP, I happened to know both sides of the game So Iwent alone on that one

It Takes Two to Tango, Sometimes

Another product I’ll refer to throughout this book is The Sleep Advisor(www.thesleepadvisor.com)—a program for consumers that identifies sleepproblems and provides remedies for solving them

As I noted before, to create a good software product generally takes twoskill sets—someone who knows programming and someone who is an expert

in the application area In the case of E-Z-MRP, I could sit on both sides ofthe table But I didn’t know squat about sleep or sleep problems So as youcan guess, it wasn’t my idea to create this program

In 1994 a colleague called me from Tucson with an interesting proposal.

He was a clinical psychologist who had developed a unique expertise in thefield of sleep disorders

“Rocky,” he said, “I’m doing these sleep consults every day.” He explained

to me, “I’m asking the same set of questions I’m coming up with a predictablerange of diagnoses, and offering people a finite set of recommendations forsolving their sleep problems Couldn’t we write a computer program to dothis?”

Being a software developer, I knew this would be much more challengingthan it sounded Being somewhat of a smart aleck, I responded, “Sure Just tell

me what the questions are that you ask, what the conditions are that you nose, and (here’s the kicker) what the links are between the questions and thediagnoses And violà! We’ve got ourselves a program.”

diag-So I went over to Tucson, we spread out the butcher block paper, andstarted to diagram what would eventually become The Sleep Advisor Aftertwo days, we gave up Translating the qualitative, intuitive approach of a clini-cal psychologist into a computer program was just too daunting

But the idea wouldn’t go away We kept coming back to it I had my doubtsthat it could ever be done—that a computer program could accurately identifysleep disorders based on the answers to a questionnaire But we kept at it, offand on, for over ten years And we finally got it to work You can see the result

to compromise what you think is right or best to achieve the goals of the

partnership

Of course, you can always buy the skill set you’re missing As a mer, you can consult with experts in the field and pay them for their advice Ifyou’re an expert in the field, like Jack Stone, you can hire the software designand programming skills you need

program-Who Are You?

So, do you want to be a millionaire? Do you have the dream—like Jack—oftaking that custom application you developed (or haven’t developed anywhereyet but in your imagination) and turning it into a product? Do you have a

vision of sitting back and opening the morning mail and sorting out the

checks? Do you see a river of money flowing into your PayPal account?

But are you stymied, intimidated, or otherwise reluctant to start down thatlong, dark road?

You are not alone—in either your dreams or your misgivings But as theold Chinese saying starts “A journey of a thousand miles ”

One of the beauties of software is that you don’t have to mortgage yourhouse to develop it It’s largely sweat equity But, in my experience, morepeople fail to realize their goals because they fail to start, rather than fail alongthe way One of the dark sides of being a software entrepreneur is that youhave to be self-motivated to be self-fulfilled There will be no boss other thanyourself who drives you to meet the goals and deadlines

So you need to start And I’m hoping that this book will give you the mation and confidence you need to guide yourself from an idea to a productin-hand that’s ready to sell

infor-What’s the Big Idea?

As I pointed out earlier, at this point in my “career,” I happen to favor

Microsoft Access as a development platform I like the kind of Goldilocksapplications that it’s good for—not too big, not too small

But programs come in all sizes You might have an idea for a simple $39utility program Or your idea might turn into a $39,000 enterprise application

It may be a horizontal application—one which is used by many people,

con-sumers or a wide variety of businesses, crossing many professional disciplines

Or it may be a vertical application—targeting a specific group of users.

Selection of your development platform—the language you choose foryour program—is up to you C, HTML, Access, SQL, Oracle—they’re all goodchoices for the right program

But regardless of the application, all software products have many things incommon And it is those common, generic topics that I have tried to cover inthis book—answers to the kinds of questions that I asked Jack Stone So thatregardless of what the size and nature of your program is, and regardless ofwhere you are in the process—not even in the starting gate or already outthere flogging your software—this book will help you to reach a successfuloutcome and steer you around the many hazards and pitfalls that lurk unseen

on the road to your first million

What This Book Is Really About

This book is really about getting to your first day in business.

It is about taking that raw idea you have for a program and creating asaleable product And setting up the support systems you need to make yourbusiness hum

If you’re going to do this thing, you have to be ready for some tough days.But nothing worthwhile ever comes easy Sometimes what it really takes is stu-pid, blind obstinacy—the drive to keep going, stubbornly solving one problem

at a time until you get the brass ring

Once I had a partner who had one of those ghastly motivational postershung in our office You know, the kind that promotes leadership and teamworkand quality through the use of tired old clichés and kitschy art This one was

no exception And yet its corny McCuen-esque message stuck in my mind andhas provided a handy boost to me many times over the years It was a picture

of a three-masted sailing ship threading its way between rocky outcroppingand small islands And the message:

Obstacles are what you see when you take your eye off the goal.

How They Did It: An Interview

with Software Developer and

Entrepreneur Al Vanderpool

I partnered with Al Vanderpool at the beginning of the personal computer revolution and had a hand in the development and marketing of what was then one of the first commercial applications for personal computers, a crit- ical path project management system named PMS-II—the name reflecting the popularity of the Radio Shack Model II computer, which was the state- of-the-art machine at that time.

Although he is no longer developing and marketing software, Vanderpool’s depth of experience in the software industry creating prof- itable products and businesses makes his a voice worth listening to Pay particular attention to the advice he has at the end of the interview for the wannabe software entrepreneur.

Smolin: You’re a software developer.

Vanderpool: That’s correct.

Smolin: And, how did you become a software developer?

Vanderpool: Well, I’ve been in computers since the early ’60s with General

Electric and I was doing a lot of technical support, and then I had theopportunity to go on my own, and lo and behold I wound up writingsoftware So it was not a conscious decision, it was an afterthought

Smolin: So, the first commercial program you did was

Vanderpool: PMS-II.

Smolin: And that was in, if I recall, around 1980?

Vanderpool: Yes, late ’70s, early ’80s.

Smolin: And that was a critical path project management system.

Vanderpool: Right.

Smolin: Why did you want to create a critical path project management

system? Where’d the idea come from?

Vanderpool: Interestingly enough, I had bought a Radio Shack Model II

computer when they first came out, and I was looking for something toplay with on it, just something to do, and we decided to track our fertilitycycle in the hopes of creating a girl

Smolin: You and your wife.

Vanderpool: Yeah So I wrote some date functions and some methods of

calculating forward and backwards from dates and coming up with theright things And then I thought, “Gee, this is the heart and soul of a criti-cal path project management system,” which I’d had a lot of experience

with at General Electric and Honeywell in the past Using, not creating.That was the nub of the idea, and from that I started using it in my con-sulting business for very simple scheduling And then it started to growand started to get embellished I created reports from it, and I was using itmyself in my consulting practice So that’s how it all came about And then

I met Rocky Smolin, and he published an article about it in one of the

computer rags at the time called Information Age, and the phone started

ringing, and we decided to go ahead and make it a full-fledged product

Smolin: So you wrote this in which language originally?

Vanderpool: Originally it was written in Microsoft Basic, and then it was

converted to a Digital Research language so it could be compiled to tect the source code

pro-Smolin: C-Basic.

Vanderpool: C-Basic or CB86, a 16-bit BASIC And then to make it all

happen, because languages and supporting software and utilities werepretty crude and pretty user-unfriendly at the time, I added a library offunctions to it, replacing the original stuff That library was from a com-pany called Minnow Bear, or something like that It had all kinds ofexpanded capabilities to it which really made the program capable of doingwhat it needed to be done, which was managing construction projects forlarger construction firms, RCA being the first user

Smolin: So this was the first product you commercialized?

Vanderpool: This was the first commercial product that I ever created.

Smolin: Who was the target user? Before you started to sell it, who did you

have in mind to sell it to?

Vanderpool: The original idea immediately went to the construction

indus-try because the need was there and they didn’t have any tools, or all thetools they did have were extremely expensive and very hard to use, and sothey didn’t do what they should be doing with them So the thought was togive them a lower priced, easy to use desktop computer capability so thatthey’d be able to do a much better job That was the target market at thetime

Smolin: And the Radio Shack Model II was the state of the art at that point Vanderpool: That was the Ferrari of the day.

Smolin: So you sent the product out on 8-inch floppy disks?

Vanderpool: 8-inch floppies, yeah.

Smolin: How long did that product run, how many years did you flog that

jewel?

Vanderpool: Probably, easily ten to twelve years of product life on it.

Mostly because of the add-on capabilities and additional products that itgave birth to that were supporting it—resource management, graphics,

production support, materials management, reporting systems, that type

of thing

Smolin: As the technology evolved, did you change platforms, or was it

always C-Basic DOS?

Vanderpool: It was always C-Basic DOS, with more capabilities as

Windows came online, more features were added to the library to takeadvantage of what was available in Windows, to whatever extent we could.Windows was pretty crude at the time

Smolin: What eventually stopped the sales, or why did you stop selling it? Vanderpool: I stopped selling the product as a conscious decision because

the support revenue from it was exceeding the sales revenue for it, and Isaw no sense in spinning the wheel of advertising for zero to negative gain

So by stopping the product sale and concentrating on end-user supportand relicensing and annual support contracts, it produced a revenue streamfor many, many more years until I finally just told everybody, no you can’trenew, and no I’m not going to answer the phone anymore That was theend of it That was probably mid ’90s before that ended So it had a com-plete run of maybe fifteen, sixteen years, which is extraordinary for sure

Smolin: You went on and did a second product?

Vanderpool: One of my PMS-II users from the Los Angeles area who

had taken the course at Brigham Young—they used to teach PMS-II atBrigham Young University graduate curriculum for construction manage-ment—and this young guy was really a cost estimator for a constructioncompany who saw the program, and he called me one day and said, “Hey, Itook your class Is there a way I could come down and talk to you? I have

an idea.” So I said sure

He comes down and he starts talking about the problems that the struction companies have in soliciting bids and getting responses frombids Most of the general contractors had stopped doing anything of a spe-cialty work, they were just contracting And they needed some supportwith cost estimating So he laid out this idea for a fax machine–drivenapplication, and I said that doesn’t sound too tough Give me a fax cardthat goes in a computer and I’ll figure it out

con-About six weeks later, we had a product that allowed a contractor tospecify what trades were needed on a particular project and then gothrough their database of subcontractors, select all of the local subs thatmet the criteria, and send them a fax inviting them to bid on this project.That product was called BidFax It was a wonderful title It became theCoca-Cola of the industry People would say, “Did you say get a BidFax onthat?”, and that’s when you know you’ve done something right It was avery, very good product for us I sold that to McGraw-Hill about 1998,

I think

Smolin: You said it was about six weeks to get it from conception to where

you were ready to sell it

Vanderpool: Essentially, get it from conception to Beta testing so that we

could take it to a live construction company and let them use it on a ited basis

lim-Smolin: How long was it in Beta?

Vanderpool: I’d say probably about two months with revisions and

enhancements before we felt like we had a saleable product

Smolin: What language was that one in?

Vanderpool: That was also written in CB86—the same thing that PMS-II

was done in, utilizing the libraries that I’d already developed there, so itwas fairly easy to construct a new application using the framework that wasalready there

Smolin: Did you do all the programming?

Vanderpool: I wrote the entire thing, yeah.

Smolin: And PMS-II as well?

Vanderpool: Yep Well, not all of the stuff in PMS-II, there were a few

contributors along the way, but I did the primary work on it, yep

Smolin: How much did it cost you in dollars, to get that, either one of

those, ready?

Vanderpool: Well, PMS-II was a, I think, early-on product in the

micro-computer revolution if you will I put $30,000 into the company to startwith, and I think I spent $7,000 of it before we had positive revenue, and

we had positive revenue from then on out So the real cost of it was quiteincidental to the overall value of it The second product, BidFax, I wouldsay I probably invested, not counting my time, but just actual out of houseinvestment, probably another $20,000 into that product for the packaging,and you know, all of the legal protection, etc., to put it together But again,

doesn’t count my time, I’m cheap [laughter].

Smolin: Were either of those products copy protected? Or how did you

enforce deterrence against illegal copies?

Vanderpool: Interestingly enough, BidFax was attacked by that very thing.

There was a rip-off copy of it that was created It was called some word acronym

two-Smolin: Was it a knock-off, or was it actually your code that they stole and

made copies of?

Vanderpool: The core of it was my code, and then they put a different face

on it and just the display part of it was changed just to make it look ent And they advertised it—they even copied our advertising, etc We had

differ-a lot of hdiffer-assle with them They [used] negdiffer-ative mdiffer-arketing, which issomething no one should ever do; their marketing message was, “Don’tbuy that; buy this because that’s bad.” It came around and put them out ofbusiness

When I sold the BidFax product line to McGraw-Hill Publishing toadd to their contractor estimating systems, that was the end of that productline, took me a year to get out of it but the copy protection was wellalmost have to go back BidFax had a different method of distributing.

We didn’t distribute it via diskettes It was distributed online I think it wasprobably the first online software distribution that had an online updatedistribution in the industry that I’m aware of I don’t remember anybodydoing this before that But because of the capabilities of the onboard faxcards that the customer already had to have installed, it was a very simplething for me to send them a key for that computer, once they’d paid for it,and then it would come to my computers and say “Here’s my key Do Ihave a valid key to get software?” So it was essentially very much like thelicensing agreements you see today Then it would download the system,install it, and run it Every month it would self-check itself, come back to

my system, see if there were any updates, and download those cally for the user So they found great value to always having fresh, up-to-date, bug-free software automatically on their system

automati-Smolin: So the problem with somebody giving it to somebody else, could

they do that?

Vanderpool: I never became aware of anyone copying it as a user and

reusing seven copies in their company, because if they did, their keywouldn’t work again I had a secure key that was hidden in a system file ontheir computer which they didn’t even know about If it wasn’t there, thenthe update service wouldn’t work, and it would just turn itself back off Sothat was a real crude, I guess you could say that’s a very crude, early begin-ning copy protection system that proved to be pretty effective

Smolin: Was PMS-II copy protected in any way on the user side?

Vanderpool: I don’t recall ever doing any copy protection on that The

industry was so young It was so new, you know microcomputers and ing software for microcomputers was so early in the game that I don’t thinkpeople even thought about stealing things off of computers at the time

sell-Smolin: So how did you price PMS-II?

Vanderpool: I wish I could say, you know, that it was a deliberate act and

that there were some value considerations going on there, but basically inthe early conversations we had with RCA they said, “Well, we want it,” and

I said, “Well, I don’t want to sell it,” and they said, “Well, we’ll give you

$1,000 a copy for it,” and I said, “Well, how about $2,000,” and they said,

“Well, how about $1,500.” And we agreed at $1,300, and that’s how it gotpriced, $1,295, and it stayed that price for its entire life

Smolin: And the BidFax, what’d you sell that for?

Vanderpool: Well, BidFax was, you know, after Broderbund or whatever

their name was, the people that came in and said sell everything for $99type of thing BidFax pricing was a different consideration It was a logical

thought-through value analysis type of thing and considered all the bution costs and all of the things we had learned in the prior years andcame to a price on it of $595, which was an extremely good value forpeople at the time They were spending more than that every time theywanted to do a bid just in clerical support to send out all of the notices.

distri-Postage was that much So they just, it was never even a moment’s thoughtprocess It was never a decision point It was, “OK Here Here’s themoney And away you go.”

Smolin: For PMS-II you had ongoing support revenue stream.

amortiz-as far amortiz-as I wamortiz-as concerned and recapturing the investment for what I ceived to be a much smaller market than what actually turned out to be

per-My revenue stream on it was online support and continuous support Forthat we charged $400 a year, and I still have people trying to buy it today

Smolin: So both of these applications were single user, not networked?

Vanderpool: Basically, yes.

Smolin: OK So you sold it single-price for a license?

Vanderpool: BidFax, we did eventually have a multiproduct package for it.

But it was simply multiple keys, you buy six copies of the single at a counted price, and that was fine with everybody

dis-Smolin: Did the original PMS-II program give rise to variations on that

product?

Vanderpool: No, but it had ancillary products added to it.

Smolin: You didn’t have a PMS-III.

Vanderpool: No.

Smolin: But you had add-ons.

Vanderpool: We had add-ons that expanded its capabilities into

manufac-turing, into facilities management, in different areas where scheduling wasstill the core but resource management and material flow managementwere just as important They had to feed into the schedule at a particulartime So I wrote modules that added those capabilities down the road

Plus, presentation graphics, plotters, things like that the bigger firmsneeded

Smolin: Where did the ideas for these add-ons come from?

Vanderpool: The place that all good ideas for products should come

from—from your customer base These were needs that were identified,verbalized by customers, that you take and create a satisfaction of thatneed When your customer base is already established, and they have aneed that’s not being satisfied, it’s almost automatic It’s predefined

Smolin: And the BidFax, same kind of evolution?

Vanderpool: Well, BidFax continued to grow, and the only add-on

prod-ucts that became available for it were packaged databases, geographicaldatabases for subcontractors by specialties Using the Construction

Specification Institute’s coding structure, we were able to take [data] fromexisting clients that wanted to get involved in a cooperative process, andthese were usually the multiple office type construction companies, theBechtels, the Fluors, those types of companies, where they had operationsthat were all over the world They had these databases, and then essen-tially we made arrangements to use them

Smolin: So you interfaced BidFax with third-party databases?

Vanderpool: Third-party databases Of subs Contractors And that then

became a new licensing revenue source without any production costs to it

at all Which is why McGraw-Hill wanted to buy this system from mebecause that’s what they did, they licensed databases So it was a natural

to fit right along with BidFax

Smolin: It sounds like you didn’t face any big problems bringing PMS-II to

market The market kind of drew you in once you presented it?

Vanderpool: More than anything, I think, when the original article was

published, it was incredibly surprising when people started calling andwent to the trouble of finding the office phone number and everything tocall and say they wanted to buy it Marketing that kind of a productbecame much more complex as the industry grew, to the point where theadvertising cost far outweighed any other cost

Smolin: I remember at the time it was exciting because there were no

channels of distribution There were no precedents There were no pricingmodels There was no competition

Vanderpool: It was a blank blackboard, fill it out yourself.

Smolin: So we had to make up our own rules.

Vanderpool: Yep.

Smolin: In case of the BidFax, did you have any problems getting that one

launched?

Vanderpool: Well, BidFax had its own defined distribution channel

because the guy that came to me with the original idea where there was noconcept problem, he wanted to get involved in software distribution him-self So I sublicensed the system back to him for distribution, and that’swhere the $495 came out That covered all of those costs, and I didn’t

worry about it He didn’t take any part of the ongoing revenue; he just didthe original sales He did a very good job of using the existing distributionchannels that were out there Some of the independent stores were still inbusiness then which are now all gone But there were also outlets that spe-cialized in different products for the construction industry that just addedthis to their bag and took it right in It went national in two weeks Twoweeks to it spread[ing] all over the country.

Smolin: So you didn’t have to do any research on the market or the

com-petition?

Vanderpool: Well, there was no competition It was a noncompetitive

envi-ronment There was nothing to even begin to compare to it

Smolin: Did you trademark both of these products?

Vanderpool: Yes All of it was trademarked.

Smolin: Did you write a manual for BidFax?

Vanderpool: The BidFax system came with a printed installation card

which was two-sided, three-sided at one time, triple fold, that just showedthem how to get online and how to get hooked up and get it going Theentire manual was built right into the software so it was distributed rightalong with the code The entire user guide, training guide, and everythingwas online

Smolin: You did have a manual, but it wasn’t a hard-copy manual?

Vanderpool: Not a hard copy.

Smolin: All electronic And how long did that take you to write?

Vanderpool: Probably about five times as long as it took to write the

soft-ware [laughter] That’s a big chore that only the people that have done it

have any idea how much resource it takes to create a reasonable userguide, because people are not very intelligent that use software and every-thing has to be triple supported; otherwise they don’t get it

Smolin: Was there a PMS-II manual?

Vanderpool: Yes It was a huge PMS-II manual It was like the Webster’s

Dictionary type of thing.

Smolin: As I recall, it originally went out in uppercased dot matrix, paper

that was torn apart

Vanderpool: [laughter] Yeah, that was the original.

Smolin: Continuous tractor feed paper, yeah, and three-hole punched.

Vanderpool: You got it, by yours truly It finally evolved into about a

3-inch-thick three-ring binder with tabs and dividers, and that was just thePMS manual Each of the add-ons had a 1-inch manual that went withthem The cost of distributing a hard-copy manual and the cost of main-taining the information that’s in a hard-print manual is unbelievableuntil you’ve experienced it